Gambling Blog

It may have been around for over 100 years, it may have seen of the full array of economic climates, but is seems as though the emergence of neighbouring Macau as a gambling capital of the Far East may be about to kill off Hong Kong Racing once and for all.  So what is going on?

While the popularity of horse racing around the world has grown over recent years, it has always been a very strong brand in the Far East.  Gambling is second nature to many in the region and the buzz of a day at races has proved to be a magnet for millions.  However, the massive expansion drive in the enclave of Macau has seen many of the high rollers previously associated with racing, move to the new super casinos.  It is the high rollers which make any gambling industry profitable, and it seems that it is this section of the community who have jumped ship and opted for the casinos of Macau.

Official figures for the Hong Kong Jockey Club show a fall in annual income of some $2.4 million a year, over twenty percent of the groups total income, which many believe has gone directly into the coffers of casino barons in Macau.  So what next for the old establishment? Can the Jockey Club fight back?

While the Jockey Club have been trying to make headway into new markets such as the internet, worldwide TV, etc, their plans have been hampered by the growing casino culture in the area.  Talk of the Club folding over the coming years is still very much speculation and highky unlikely, but it seems that there will need to be some major changes in due course. 

As they say in life, “You never know what you had until it’s gone!”, and it would be a sad day to see horse racing under more pressure in the region.

In a move which is becoming more and more embarrassing by the day for the French authorities, it was announced that Unibet Chief Executive Petter Nylander was arrested in Holland on the orders of the French authorities.�

Initially they claimed that Unibet were operating illegally in the French online gambling market, and much like the similar situation in the US, they applied for his arrest.� It has since been proved that Unibet are a legal EU entity and as such have every right to be present in the French online gambling market.� So why was he arrested?

The arrest of Mr Nylander has created a situation which is set to continue for some time, after revelations that this is not the first time the authorities have acted illegally in trying to protect their domestic online gambling industry.� This revelation has prompted a major back lash from European counterparts, who are in the process of bringing Europe closer together, not segregating markets.

While the French have since rescinded the arrest of Mr Nylander, who was being held in the Netherlands, this episode is sure to result in some form of legal action, and major censorship for the French.� Such is the embarrassment that this has caused, the French regulators have announced plans to formally open up their online gambling markets, although participants will need a licence to trade - is this against EU regulations?

It remains to be seen if the French online gambling markets will actually be formally opened up to non-national companies, or whether this is just a tactic to draw some of the sting out of the recent farce.� Either way, the revelations that this is not the first time the authorities have illegally discriminated against online gaming companies is a major blow to their credibility.�

While some may wonder why the French have sunk to such depths, it is all to do with the potential to tax what is becoming one of the more lucrative industries in the world.

While up until the start of the year and the first mutterings of discontent within the ranks of the US authorities, stock markets around the world could not get enough of the online casino companies.� They were being floated on stock markets around the world with multi billion dollar price tags and investors were falling over themselves to get a share.� Now? Well, investor demand has collapsed as have their profits, so whats next?

While the headlines in the newspapers would appear to indicate that the sector is dead and buried, this is far from the case.� The casino companies are working around the clock to expand their operations overseas, as well as placing subtle pressure on the US authorities to reinstate the online gambling sector.� While publicly they seem to be having little luck, privately there are movements with many observers expecting regulations to be lifted later this year.

Lets not forget that many of the online companies made millios of dollars in the few years prior to the US lock out, much of which has been held back for future investment and marketing.� The financial health of many of these companies is nowhere near as bad as the headline figures of falling profits and increasing debts would have you believe.� While the US was THE major market, there are developments and increasing interest from around the world.

The gambling industry always seems to court controversy, and often receives little sympathy in difficult times, but it has and will bounce back again.� The profile of the Poker industry in particular has grown massively over the last few years, as have the profiles of many online casino companies.� The industry may be subdued at the moment, but it will bounce back stronger and fitter than ever before - watch this space!

For those who check the casino news on a regular basis, one common feature is the differing news and views which come out of the different states of the US.� Some states seem to be pro-casino and some seem to be against them, but why do opinions differ so much and will it ever change?

There are a number of reasons why opinions seem to differ so much which include :-

State Government

In the US each state has its own local government who are in charge of various areas of the local economy, laws, etc.� A lot of the differing views about gambling can be traced to the political�party in power, with the religious right very anti-gambling and vocal in their comments and opinions.

Tourism

Many of the millions of visitors to the US will at some point expect to come across a casino, which is why places such as Las Vegas will always be associated with casinos until the end of time.� In a need to ensure that tourists enjoy their stay and will come back again, many popular tourist states will have a pro-casino policy.

Taxes

When you think of Las Vegas, you automatically think of casinos and gambling arenas.� These establishments not only attract the tourist trade, they pay millions of dollars in taxes to the state and have a massive impact on local spending.� Investment, employment and further trade for nearby businesses are some of the effects which have been seen

Conclusion

In each and every state of the US it appears that someone has an agenda, a plan of attack, and they tend to let nothing get in their way.� The rigourous pursuit of the gambling industry by many local authorities has often been born out of strong political influences, often related to the religious parties - many of which have a strong say in US politics.� Often touted as the land of the free, this is not always the case.

While not too widely covered in the world press, Neteller have only just received clearance to unfreeze the accounts of their US customers, many of whom had used the online payment company to fund their online gambling exploits.� As many will be aware, earlier this year the US authorities clamped down on all US online gambling and set out to stop the life blood of the gambling industry, funding.

After arresting the Canadian founders of Neteller, and charging them with handling billions of dollars in illegal gaming proceeds, the US authorities have finally given US customers access to their funds.� As you would expect in the current uncertain environment there were massive withdrawals on the news, with $70 million rumoured to have been transferred by customers.

While the US authorities had explained their reasons behind freezing the accounts, the customer seems to have become stuck in the middle of the high profile arguments.� While the company still operates in some 160 countries worldwide, the US experience has shocked both Neteller and many customers.� It will either need some great public relations action from the company, or a reversal of the US authority rulings to see consumer confidence return.�� While it may be a little too soon to write-off Neteller, many are predicting a very difficult few months ahead.

The online casino industry has been one of the main casualties under the current US tactics to close online gambling in the States, and while some believe that the recent rulings will be relaxed at some stage, there are others who are more sceptical.�

The situation is turning into a game of poker and the US authorities are currently holding all of the aces, but whether they will agree to share the pot and walk away remains to be seen!

For those who have been watching the casino scene, they will know that only 5 years ago Macao was a quiet back water situated on the Southern tip of China.� Looking at Macao today you would not realise that it was the same place, it has now become the mecca of gambling and it is now attracting the attention of all the industries big players.�

Figures from 2006 show that Macao reported gambling revenue of some $6.95 billion, against $6.69 billion from Las Vegas and $5.21 billion from Atlantic City.� It is now becoming the gambling venue of choice for the big players and while Las Vegas Sands Corp are spending $800 million on a Bethlehem casino, they are spending a massive $12 billion in Macao.� This is just a simple example of the attractions of the area, and strengthens the belief of those in the market place that Macao is set to pull further and further away from the other gambling centres of the world.

The far east has always been a hot bed of casinos and gambling in general, and it is only the recent relaxation of local gaming laws which has allowed the majors of the world to invest in the area.� For such a small area of the world, the pull of the casino industry is enormous and there seems little sign that this will change in the short term with the Macao economy set to benefit further.

At some stage we may see a slowdown in the number of new casino licences approved, at which point we will probably see a massive increase in the perceived value of casinos already operating in the area.� That is when the local operators who have been there since day one will hit the big time, the day they will be able to cash in their own chips.